Navient Agrees to Settle Teachers’ Loan Forgiveness Lawsuit
To end a lawsuit brought by a group of teachers, Navient, one of the nation’s largest student loan servicers, has agreed to alter its practices for identifying and guiding public service workers seeking to use a long-troubled loan forgiveness program.
Navient and educators backed by the American Federation of Teachers, one of the nation’s largest unions, said in a court filing late last month that they had agreed to settle a lawsuit brought in 2018 in federal court in Manhattan.
The suit centered on the notoriously troubled public service loan forgiveness program. It’s supposed to aid people who work in vital but often low-paying government or nonprofit jobs by allowing them to have their remaining education debt eliminated after a decade of work and loan payments.
The teachers’ complaint accused Navient of negligently blocking their access to the program by failing to accurately explain its rules and requirements. Several said they had spent years making payments, only to discover too late that the payments hadn’t counted toward having the loans forgiven.
Judge Denise Cote dismissed most of the teachers’ claims in July. Many were too vague and lacked factual documentation, she wrote, and others did not break the relevant laws. The two sides began mediated settlement discussions soon after.
Navient agreed to train its representatives to listen for key words to identify borrowers who might qualify for the program, to develop standardized templates to send to borrowers who request information, and to monitor its customer service calls to detect and fix problems in how it guides public service workers.
It also agreed to pay $1.75 million to fund a new, independent organization that will educate and counsel borrowers in public service jobs. Each of the 10 plaintiffs will also receive $15,000.
Representatives of Navient and the American Federation of Teachers declined to comment on the proposed settlement. If the court grants permission, a notice about the proposed settlement will be sent to everyone who had a loan serviced by Navient from late 2007 onward and who indicated an interest in the public-service forgiveness program.